Senate Study Bill 3045

SENATE/HOUSE FILE
BY (PROPOSED DEPARTMENT
OF REVENUE BILL)
A BILL FOR
1 An Act relating to the administration of the streamlined sales
2 tax agreement by the department of revenue.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 423.1, subsection 51, paragraph a,
1 2 subparagraph (2), Code Supplement 2011, is amended to read as
1 3 follows:
1 4 (2) The cost of materials used, labor or service cost,
1 5 interest, losses, all costs of transportation to the seller,
1 6 all taxes imposed on the seller except as provided in paragraph
1 7 "b", subparagraphs (5) and (6), and any other expenses of the
1 8 seller.
1 9 Sec. 2. Section 423.1, subsection 51, paragraph b, Code
1 10 Supplement 2011, is amended by adding the following new
1 11 subparagraphs:
1 12 NEW SUBPARAGRAPH. (5) Any state or local tax on a retail
1 13 sale that is imposed on the seller if the statute, rule, or
1 14 local ordinance imposing the tax provides that the seller may,
1 15 but is not required to, collect such tax from the consumer, and
1 16 if the tax is separately stated on the invoice, bill of sale,
1 17 or similar document given to the purchaser.
1 18 NEW SUBPARAGRAPH. (6) Any tribal tax on a retail sale that
1 19 is imposed on the seller if the tribal law imposing the tax
1 20 provides that the seller may but is not required to collect
1 21 such tax from the consumer, and if the tax is separately stated
1 22 on the invoice, bill of sale, or similar document given to the
1 23 purchaser.
1 24 Sec. 3. Section 423.1, subsection 51, Code Supplement 2011,
1 25 is amended by adding the following new paragraph:
1 26 NEW PARAGRAPH. 0d. "Sales price" shall include
1 27 consideration received by the seller from third parties if all
1 28 of the following apply:
1 29 (1) The seller actually receives consideration from a party
1 30 other than the purchaser and the consideration is directly
1 31 related to a price reduction or discount on the sale.
1 32 (2) The seller has an obligation to pass the price reduction
1 33 or discount through to the purchaser.
1 34 (3) The amount of the consideration attributable to the sale
1 35 is fixed and determinable by the seller at the time of the sale
2 1 of the item to the purchaser.
2 2 (4) One of the following criteria is met:
2 3 (a) The purchaser presents a coupon, certificate, or other
2 4 documentation to the seller to claim a price reduction or
2 5 discount where the coupon, certificate, or documentation is
2 6 authorized, distributed, or granted by a third party with the
2 7 understanding that the third party will reimburse any seller to
2 8 whom the coupon, certificate, or documentation is presented.
2 9 (b) The purchaser is identified to the seller as a member
2 10 of a group or organization entitled to a price reduction or
2 11 discount. For purposes of this subparagraph division, a card
2 12 identifying the holder as a preferred customer, which card is
2 13 available to any patron, does not constitute membership in such
2 14 a group or organization.
2 15 (c) The price reduction or discount is identified as
2 16 a third=party price reduction or discount on the invoice
2 17 received by the purchaser or on a coupon, certificate, or other
2 18 documentation presented by the purchaser.
2 19 Sec. 4. Section 423.31, Code 2011, is amended by adding the
2 20 following new subsection:
2 21 NEW SUBSECTION. 8. Persons required to file a return under
2 22 this section may instead file a simplified electronic return
2 23 pursuant to section 423.49.
2 24 Sec. 5. Section 423.49, subsection 4, paragraph d, Code
2 25 2011, is amended to read as follows:
2 26 d. A model 4 seller, or a seller not registered under the
2 27 agreement who is otherwise registered in the state, may elect
2 28 to file a simplified return. Model 4 sellers, or sellers not
2 29 registered under the agreement who are otherwise registered in
2 30 the state, electing to do so shall file the first part of the
2 31 return each month.
2 32 Sec. 6. Section 423.49, subsection 4, paragraph e,
2 33 unnumbered paragraph 1, Code 2011, is amended to read as
2 34 follows:
2 35 A model 4 seller required to register in the state, or a
3 1 seller not registered under the agreement who is otherwise
3 2 registered in the state, may submit the information collected
3 3 in the second part of the return in one of the following ways:
3 4 Sec. 7. Section 423.52, subsection 1, Code 2011, is amended
3 5 to read as follows:
3 6 1. Sellers and certified service providers using
3 7 databases derived from zip codes or state or vendor provided
3 8 address=based databases are relieved from liability to this
3 9 state or its local taxing jurisdictions for having charged and
3 10 collected the incorrect amount of sales or use tax resulting
3 11 from the seller or certified service provider relying on
3 12 erroneous data provided by this state on tax rates, boundaries,
3 13 or taxing jurisdiction assignments. If this state provides an
3 14 address=based system for assigning taxing jurisdictions, the
3 15 director is not required to provide liability relief for errors
3 16 resulting from reliance on the informationa database derived
3 17 from zip codes and provided by this state if the director has
3 18 given adequate notice, as determined by the governing board, to
3 19 affected parties of the decision to end this relief.
3 20 EXPLANATION
3 21 This bill relates to the administration of the sales and use
3 22 taxes under the streamlined sales tax agreement.
3 23 Iowa is a member of the streamlined sales and use tax
3 24 agreement, which is an effort to administer state sales and
3 25 use taxes in all participating states according to the same
3 26 simplified system. Under the agreement, Iowa must periodically
3 27 make changes in the administration of the sales and use taxes
3 28 in order to remain in compliance.
3 29 The bill amends the definition of "sales price" to exclude
3 30 any state or local tax on a retail sale that is imposed on the
3 31 seller if by law the seller may but is not required to collect
3 32 the tax from the consumer, and if the tax is separately stated
3 33 on the invoice, bill of sale, or similar document given to the
3 34 purchaser.
3 35 The bill further amends the definition of "sales price" to
4 1 exclude any tribal tax on a retail sale that is imposed on the
4 2 seller if by law the seller may but is not required to collect
4 3 such tax from the consumer, and if the tax is separately stated
4 4 on the invoice, bill of sale, or similar document given to the
4 5 purchaser.
4 6 The bill also amends the definition of "sales price" to
4 7 include consideration received from third parties if four
4 8 criteria are met. First, the seller must actually receive
4 9 consideration from a party other than the purchaser and the
4 10 consideration must be directly related to a price reduction
4 11 or discount on the sale. Second, the seller must have an
4 12 obligation to pass the price reduction or discount through
4 13 to the purchaser. Third, the amount of the consideration
4 14 attributable to the sale must be fixed and determinable by the
4 15 seller at the time of the sale. Fourth, one of the following
4 16 must apply: the purchaser presents to the seller a coupon,
4 17 certificate, or other documentation acquired from a third party
4 18 to claim a discount; the purchaser is identified to the seller
4 19 as a member of a group or organization entitled to claim a
4 20 price reduction or discount; or the price reduction or discount
4 21 is identified as a third=party price reduction or discount
4 22 on the invoice received by the purchaser or on a coupon,
4 23 certificate, or other documentation presented by the purchaser.
4 24 The bill allows sellers that have not registered under the
4 25 streamlined sales and use tax agreement but that are otherwise
4 26 registered in the state and required to file sales tax returns
4 27 to elect to file using the simplified electronic return.
4 28 The bill amends Code section 423.52 relating to liability
4 29 relief for sellers and certified service providers. Under
4 30 current law, relief from liability is granted to sellers and
4 31 certified service providers who charge incorrect sales and
4 32 use tax after relying on erroneous tax rate, boundary, or
4 33 jurisdiction data provided by the state in databases derived
4 34 from zip codes or addresses. However, the state may deny
4 35 liability relief to a seller or certified service provider for
5 1 reliance on either database as long as the state maintains an
5 2 address=based system for assigning taxing jurisdictions, and
5 3 provides adequate notice to the affected parties. The bill
5 4 provides that if the state maintains an address=based system
5 5 for assigning taxing jurisdictions, it may only deny liability
5 6 relief to sellers and certified service providers for errors
5 7 resulting from the seller's or certified service provider's
5 8 reliance on a database derived from zip codes.
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Text: SSB3044
Text: SSB3046